After complaining about the direction of the Cantopop industry and falling out with her then label, Black and White, Ip chose to retire from music in 1988 and went into semi-retirement, with occasional roles in movies.

She returned to the Cantopop scene in 2002 with an EP, which, along with a live recording of her 2002 concert in Hong Kong, were both released by Universal Music Group.

Ip has been recognised on several occasions, including in A Simple Life, for which she won Coppa Volpi for the Best Actress at the 68th Venice International Film Festival.

"[8] Ip participated in Hong Kong's 2014 Umbrella Movement, where protesters demanded electoral reform from the government.

[17][18] Ip was one of few Hong Kong celebrities to voice support for the protesters, leading to her songs being removed from Mainland China's music streaming platforms.